As I shared in my past article https://strategicsearch.com/technical-recruiting-blog/manufacturing/ manufacturing is the key to a nation’s strength as well as high paying jobs for its workers. There is no better way to ensure that both skilled and unskilled personnel can easily provide for their families than by safeguarding and building a country’s manufacturing base.

Unfortunately, American’s manufacturing base has been dwindling over the past few decades. There have been decent initiatives, such as the manufacturing incubator http://www.industrialcouncil.com on Chicago’s Near West Side, which was created in 1980 with only $2.6 million in federal grants. It was the first of its kind in the nation and currently houses 138 businesses including energy bar maker Element Bars.

Additionally, President Obama’s Digital Manufacturing initiative is a step in the right direction. However, a lot more needs to be done. For example, even if a company wants to use an American contract manufacturer to produce their goods and services, there are very few to choose from.

Contract manufacturers make products for other companies that want to focus on the R&D, scientific, engineering, technical and marketing aspects. Unfortunately, there are few contract manufacturers still left in the U.S. and those that do exist generally make parts instead of finished goods! For example, Gateway Manufacturing Inc. still employs 37 people in Mount Sterling, Kentucky to make assorted products such as wooden crates and dog-care items for other companies. However, they do not produce consumer goods such as electronics. For those needs, U.S. companies have to travel to China, where a search for contract manufacturers yields more than 2,000 entries!

In China, you can find a specialist to make any product for you. For example, if you wanted to have someone manufacture a new toaster oven for you, there are more than a dozen such contract manufacturers to choose from. Additionally, Chinese contract manufacturers are very flexible in their terms and demands. For example, one of my executive recruiting clients needed a small order of plastic injection molded products. He found a contract manufacturer in Shenzhen, China who was willing to produce a minuscule run of only 500 pieces!

Though most economists and technical recruiters both agree that it doesn’t make much economic sense for the U.S. to try and manufacture everything for everyone, it will help our economy and jobs landscape immensely if we could concentrate on a few select areas of contract manufacturing. This will boost the economic growth for our country and create a lot more high paying jobs for our citizens. It would also reduce our $723 billion trade deficit because we would be buying more American made products instead of sending our dollars overseas to contract manufacturers in China. To that end, our government should focus on incentives to attract U.S. companies towards contract manufacturing.

a) Those Americans that are involuntarily working part-time (and want a full-time job)

b) Those that have just given up looking for work, the figure almost doubles to 11.3%!

Additionally, a new report found that young African-Americans who toiled to obtain a four-year degree have a 12.4% unemployment rate versus 5.6% for their white counterparts! Furthermore, they are finding it a lot harder to land jobs that actually utilize their degrees. This is even true for African-American graduates in the STEM fields of science, engineering, math and technology!

The report is entitled, “A College Degree is No Guarantee.” One of the co-authors, John Schmitt, who is a senior economist with the Center for Economic and Policy Research shared this dire reality, “they graduated high school like they were told. They went to college and graduated. They entered the labor market, but they are more likely to be unemployed than their white counterparts.”

Many of these African-American graduates were the first in their families to attend college so they bear heavy expectations as well as responsibilities to succeed. Unfortunately, when their positive outcome (college graduation) doesn’t translate into an equally positive conclusion (landing a job), this creates additional stress on them.

There are many reasons for this employment gap including black college graduates may not have strong job networks, they may lack the experience to sail across the corporate world or some companies still continue to discriminate in their hiring practices. Whatever the reason, my volunteer work at CAN TV (Chicago’s public access network), centers on helping minority graduates to navigate the job market. It focuses on my 12 Commandments of Interviewing. In the process, I constantly remind my students that life is not fair and the world does not revolve around them! Instead of getting angry, I recommend that they work twice as hard as everyone else. This is the case because hard work, NOT grand plans, are going to help you to succeed! To that end, you need to have a plan and work that plan. The 12 Commandments can provide you the plan. Then you need to be the engine for that plan’s success!

Currently, there are some 18 million programmers worldwide. Add to that number another 18 million Information Technology (IT) professionals for a grand total of 36 million software and IT experts who are creating the amazing technology that is transforming a wide range of industries, according to recent figures from International Data Corporation.

This is why venture capitalists like Andreessen Horowitznow have three major investments in companies that serve the broad software and IT communities. For example, their recent investment in Stack Exchange, which runs a popular question and answer board for developers called Stack Overflow. Additionally they invested:

a)$100 million in GitHub, which is an open-source code-sharing platform

One main reason for these investments is these companies reach tens of millions of software developers and IT professionals globally. By doing so, they are targeting the foundation of all cutting-edge software creation. This is important, especially with the systematic shift away from the early days of software engineering and IT. Then, programmers where siloed off in cubicles, working for their individual companies, communicating mostly with co-workers, relying on computers and machinery purchased by their company and only learning new software and IT trends supplied by company manuals.

Now, with the advent of open-source software, collaborations among software developers and IT professionals have grown exponentially! Two major catalysts are:

1)The popularity of mobile apps that can be built by an individual software programmer

This has led to the launch of companies like Stack Exchange, which offer software and IT services that connect individual software engineers and IT professionals to each other as well as offering tools directly to them over The Cloud.

As a result, one IT job recruiter that I met at a recent engineering recruiting symposium said that, “software developers, acting on their own and connecting directly to other software engineers, have directly changed how software is purchased. Often software engineers hear from one another about the latest software and tools, start using them on their own and then persuade their larger organizations to place large orders. As a result, it’s now a bottoms-up landscape in software.”

All of this has led to programmers emerging as a distinct market. Therefore, many executive recruitment agencies have shifted their technical recruiting focus from companies to individuals. This has led to certain software engineers and IT professionals becoming the “Rock Stars” of the new programming age.

On Wednesday, the Office of Advocacy released Small Business Profiles for the States and Territories, the annual snapshots of state-level small business activity. The profiles report on the number of small firms, employment, and owner demographics. They also list each state’s top small business industries by number of firms and number of employees. The profiles cover the 50 states, the District of Columbia, and the United States. They also provide limited information on the U.S. territories.

For example, in Illinois, where my executive recruiting firm is based, there are 1,169,961 small businesses, which employ about 50% of our state’s private sector workforce. Please go to both:

For a more detailed description of the make up of Illinois’ and other states small business characteristics and jobs creation statistics.

Unfortunately, most small businesses have been handcuffed by the growing taxes and regulations imposed upon them by their local, state and federal government over the past ten years. For example, many major city mayors from Los Angeles to New York are focused on improving wages through legislative means such as a mandated $15 per hour minimum wage. Last year fourteen states raised their wage floors. Furthermore, as I wrote previously at “Mr. President: NLRB Policies Are Killing Jobs!“ the current National Labor Relations Board is one of the most antagonistic towards business of all time! All of this has taken its toll on entrepreneurship and new business creation. For example, the percentage of Americans under 30 years old who were willing to risk becoming an entrepreneur recently hit a 24-year low! According to the latest figures from the Federal Reserve, only 3.6% of households headed by adults younger than 30 owned stakes in private companies. This compares with 6.1% back in 2010 and 10.6% in 1989, when the central bank began collecting this vital information.

Instead, government should follow the advice of most executive recruiters, including R&D recruiters, engineering recruiters, scientific recruiters, technical recruiters, IT recruiters and manufacturing recruiters, whose livelihood is based upon expanding jobs and wages. As a result, most in the executive recruitment field would advise to cut taxes, reduce new legislative burdens and scale back government to only the most essential activities such as improving our overall education. Not take a Big Brother approach that has been in vogue with the Obama administration.

As I shared in my last article government is NOT the best solution for jobs creation or wage growth. Instead, the legislative process usually produces major impediments, through both significantly increased taxes and regulations, which obstruct the historically proven catalyst for jobs and wages growth, entrepreneurs.

However, there is a major role government can play in influencing long-term jobs, wages and economic growth. As I wrote previously at: a)R&D Yields Many Ancillary Societal Benefits!and b)3-D Printing: A Major R&D Tool local, state and federal government should work together with industry to significantly improve our nation’s educational, training and retraining programs especially in the STEM (Science, Technology, Engineering and Math) fields. This will mean a lot more skilled, innovative and highly paid workers now and in the future.

One trend that exemplifies this is the technology industry’s latest recruiting push: focusing executive recruitment teams on uncovering software prodigies as young as 13 to create apps for their smartphones! R&D, scientific, engineering, technical, and IT leaders such as Apple and Google are concentrating both their internal engineering recruiting efforts and their external technical recruiting teams on better ways to unearth young software geniuses to write code for their newest mobile-operating systems. For example, Apple in 2012 both: a) lowered the minimum age to attend its developer conference from 18 to 13 and b) made younger teens eligible for scholarships to cover the $1600 cost of registration. As a result, minors claimed nearly 50% of Apple’s awarded 200 scholarships at last year’s conference, where they introduced their new, Swift programming language that streamlines the app-making process.

Google also started its own youth program at its Google I/O developer conference last June. It hosted 200 children between the ages of 11 and 15 for a half-day, including introducing them to some basic tools used by its developers.

But how does an emphasis on recruiting young teens benefit all workers especially older, displaced ones?Though many experts acknowledge that younger kids have major learning advantages (e.g. brain plasticity, which allows them to more quickly absorb new concepts) over older workers, this trend proves the need for the proper foundation in STEM skills. This is something all workers can benefit from and demonstrates the role government can play in improving our STEM educational, training and retraining programs.

Unfortunately, our executive recruitment firm is regularly contacted by older workers that have been displaced by major layoffs. Many times these same companies, which are laying off workers at one slowing division, are instructing their management recruiters to ramp up recruiting at other growing divisions. This is an area where government can step in to play a major role. It can significantly increase funding for successful programs that can quickly teach displaced workers needed STEM skills for being productive in growing fields.

Whether your bias is towards the public educational structure or vouchers, you probably agree that our current educational, training and retraining systems are not effective. As was reported at http://www.businessinsider.com/pisa-rankings-2013-12 America’s students now rank a) 31st in math b) 24th in science and c) 21st in reading versus the rest of the world! Therefore, as I wrote at https://strategicsearch.com/technical-recruiting-blog/comedic-education-increases-rd/ better STEM educational, training and retraining methods need to be discovered because these are at the core of most high paying technology jobs. The ability to quickly retrain displaced workers into learning new and desired STEM skills will also mean a lot higher wages. Just because someone is older doesn’t mean that they cannot continue to be innovative and productive. The key is developing better STEM educational, training and retraining programs for our workers. This is an area where government can be of major assistance.

Almost daily on the news we hear local, state and federal politicians screaming to raise the minimum wage. Unions wanting to increase their membership ranks are fueling most of this fervor. The fight for $15 per hour is center stage among several vigorous union organizing efforts, including fast-food workers who have been traditionally difficult to organize due to high turnover rates. But is this campaign in the best interest of workers’ long-term health and increased wages?

Two important facts that most politicians and labor leaders have lost sight of are: a) history proves that government is extremely inefficient in creating jobs and raising wages and b) workers are not entitled to anything from employers. Instead, the main goal of any business in the private sector is to make money. They have no obligation to hire anyone or pay any specific wage. However, as I wrote previously “Key To More Jobs: Fuel Entrepreneurs!” research from the Small Business Administration proves that 70% of the net new jobs in the U.S. over the past 30 years (prior to the recent recession) were created by small businesses! Therefore, when entrepreneurs increasingly start and grow new companies, they significantly increase jobs creation and wages!

Additionally, many R&D recruiters, scientific recruiters, engineering recruiters, technical recruiters, IT recruiters and manufacturing recruiters we polled, that are part of our executive recruitment network, shared that employers naturally and gladly (without any government intervention) will pay higher wages when skilled employees are in short supply and high demand in the marketplace. They do so not out of the goodness of their hearts, but because it is in their best economic interests to grow their businesses and make money. Therefore, all these misguided efforts towards mandating a minimum wage should be refocused towards creating a healthy environment for entrepreneurs to flourish. When successful, they will naturally hire many new workers and gladly pay higher wages.

Mistakenly, many major city mayors from Los Angeles to New York are fixated on boosting sluggish wages with legislative measures. Fourteen states raised their wage floors in 2014. Many of these cities were encouraged by the Obama administration’s very pro-union stance. Furthermore, as I wrote previously at “Mr. President: NLRB Policies Are Killing Jobs!“ the current National Labor Relations Board is one of the most antagonistic towards business of all time! These foolish efforts are squeezing the lifeblood out of entrepreneurship and new business creation. For example, the percentage of Americans under 30 years old who were willing to risk becoming an entrepreneur recently hit a 24-year low! According to the latest figures from the Federal Reserve, only 3.6% of households headed by adults younger than 30 owned stakes in private companies. This compares with 6.1% back in 2010 and 10.6% in 1989, when the central bank began collecting this vital information.

There are many reasons for this decline including limited access to capital, lack of skilled workers and increased taxes and regulations. Anyone of these areas could be the focus of government to help entrepreneurs and in turn raise wages. For example, the government should improve STEM education. As I wrote in “Exercise Our Nation’s Students Into More Engineering, Scientific and Technical Graduate Studies and Jobs“ our science, technology, engineering and math instruction is sorely lacking. Many companies have to spend a lot of their own money to create training programs to make up for significant skill gaps.

Another area the government can help is significantly reducing tax and legislative burdens on small business owners. Growing taxes and regulations only increase the risk to young entrepreneurs, which makes them think twice about wanting to start a business.

In summary, the real way to create a lot more jobs with significantly higher wages is not through mandating higher minimum wages. Instead, government needs to provide a lot more incentives for the historically proven creators of new jobs and higher wages, entrepreneurs!

The U.S. posted its strongest year of job growth in 15 years and the unemployment rate fell to a post recession low last month. Nonfarm payrolls rose a seasonally adjusted 252,000 in December, the Labor Department said Friday, with broad-based gains across a wide array of sectors. Additionally, the unemployment rate fell .2% in December to 5.6%, which is its lowest level since June 2008.

Many executive recruiters we polled had predicted employment to rise by 240,000 in December and the unemployment rate to tick down to 5.7%. Furthermore, revisions by the Labor Department showed 50,000 more jobs added in October and November than previously estimated. November’s payroll gain of 353,000 was revised up from an initially reported 321,000. October’s payroll gain of 261,000 was revised up from 243,000. This is all better than expected.

Unfortunately, a lot of the decline was driven by people who stopped looking for work and are not even being counted by the Labor Department figures. Also, even with such a low unemployment rate, still nearly 8.7 million Americans who want a job can’t find one.

Moreover, many engineering recruiters, scientific recruiters, R&D recruiters, IT recruiters, technical recruiters and manufacturing recruiters in our executive recruitment network have found that earnings data continues to be rather disappointing. Most of us have not seen a broad-based increase in wages. Stagnant wages have limited household budgets and been a check on consumer spending. Average hourly earnings for private-sector workers fell 5 cents to $24.57 in December. The average workweek held steady at 34.6 hours in December. Over the past year, hourly earnings are up a mere 1.7%, barely ahead of inflation’s 1.3% rate. As a result, we cannot consider this employment report a total success.

Overall, though, Friday’s report was broadly positive and capped a solid year for the labor market. Altogether, employers added 2.95 million jobs in 2014, the biggest calendar-year increase since the figure topped 3 million in 1999. Of course, the U.S. population has grown significantly in that time, to more than 318 million in 2014 from 279 million in 1999, when the unemployment rate ended the year at 4.0%.

Recent labor-market gains underscore the relative strength of the U.S. economy, especially compared with Japan, nations in the Eurozone and many developing countries. U.S. gross domestic product, the broadest measure of output, expanded at a 5% pace in the third quarter, the strongest advance in 11 years.

Monthly job increases averaged 289,000 per month in the final three months of the year, compared with 246,000 per month for all of 2014 and 194,000 for 2013.

Friday’s report showed the strongest hiring in professional and business services in December, including fields such as administrative and waste services and computer system design. Construction, food services, health care, manufacturing and wholesale trade also posted gains.

If the economy continues to create jobs at this strong pace, wages should start to rise faster and more people could come off the sidelines. Labor-force participation rates are stuck near levels last seen in the late 1970s. The participation rate was 62.7% in December, down two-tenths of a percentage point from November and matching a 36-year low. Once people leave the workforce, they are no longer counted as unemployed.

Finally, a broader version of the unemployment rate, which includes involuntary part-time workers and people marginally attached to the labor force, was 11.2% last month, down from 11.4% in November.

Recent figures show that the job market is dramatically improving including the last Bureau of Labor Statistics (BLS) job numbers for 2014 revealed 321,000 new jobs created. BLS also reported that the last two monthly unemployment rate figures for 2014 were 5.8%, which were the lowest figures since 2008! Also, the Illinois unemployment rate continued to fall. Its last two figures for 2014 were both 6.6%.

U.S. hiring gains have been across the board including the BLS job sectors:

Professional & Business Services, which added another 86,000 new jobs for the last reporting month of 2014. This was an increase of 49,000 jobs over the previous month’s figures.

Health Care, which rose by 29,000 jobs for the last reporting month of 2014. This sector also added an average of 22,000 new jobs per month during 2014!

Retail, which grew by 50,000 new jobs for its last reporting period of 2014. It also added an average of 22,000 new jobs per month during 2014.

Food Services & Drinking Places, which rose by 27,000 new jobs for its last reporting period of 2014. Furthermore, the sector added 321,000 new jobs during 2014!

Manufacturing, which added 28,000 new jobs during the last monthly readings for 2014. Additionally, the manufacturing sector added 171,000 new jobs during 2014.

Transportation and Warehousing, which added 17,000 new jobs during the last reading for 2014. It also added 143,000 new jobs for 2014.

Furthermore, as an executive recruiter that focuses on R&D, engineering, scientific, IT, technical and manufacturing sectors, I predict that robust hiring will continue, short of a major catastrophe (e.g. a war or oil embargo), to grow in 2015. Specifically, as I shared during an interview with First Business on December 23, 2014, 3 hot job sectors, with a lot more demand than supply in 2015, are:

Big Data

Lean Manufacturing

The Trades

Big Data is the field of data scientists with the ability to uncover unique patterns among vast amounts of fragmented data. As I wrote “Hot Job: Data Scientist” this field has been growing exponentially as both the public and private sectors increasingly need people with these capabilities. For example, e-marketers like Amazon.com need to discover novel patterns of consumer behavior in order to engineer more targeted marketing campaigns.

Finally, the demand for skilled Trades such as electricians and welders will continue to grow in 2015. As proof of this growth, the American Welding Institute recently said that the average age of welders is 54. As a result, there will be over 400,000 new openings for welders over the next ten years starting in 2015.

$24.4 billion, which is the estimated retail sales by the nation’s department stores (including leased departments) in December 2013. This represents an estimated 40.9 percent jump from the previous month when retail sales were estimated at 17.3 billion. No other month-to-month increase in department store sales last year was as large.

22.8%, which is the estimated growth in inventories by our nation’s department stores (excluding leased departments) from Aug. 31 to Nov. 30, 2013.

13.9%, that is the estimated percentage of total 2013 sales for department stores (including leased departments) in December. For jewelry stores, the estimated percentage was 19.1 percent.

$44.5 billion, which is the estimated value of retail sales by electronic shopping and mail-order houses in December 2013 — the highest total for any month last year.

30,185, which is the number of electronic shopping and mail-order houses in business in 2012 (the last year available for reporting). These businesses, which employed 365,508 workers in the pay period including March 12, are a popular source of holiday gifts.

$1 Billion, which is the value of U.S. imports of Christmas tree ornaments from China between January and September 2014. China was the leading country of origin for such items. Similarly, China was the leading foreign source of artificial Christmas trees shipped to the United States ($137.5 million worth) during the same period.

563, which is the number of locations that primarily produced dolls, toys, and games in 2012 (the last year available for reporting); they employed 7,481 workers in the pay period including March 12. California led the nation with 95 establishments.

Also, the U.S. economy gained a lot of momentum later in the year, including the DOW rising almost 1000 points in the final five trading days before Christmas, to close above 18000 for the first time in history! Additionally, there was the strongest GDP report in over 10 years!

What about jobs growth? As part of many engineering recruiter, scientific recruiter, technical recruiter, R&D recruiter, IT job recruiter, Electrical engineer recruiter and executive recruiter forums and associations, I regularly poll my fellow management recruiters to get their pulse. Almost to a person, all executive recruitment agencies agree with my comments made during my recent interview with First Business about 2015 hiring trends.

Federal Reserve officials took a small step toward raising short-term interest rates in 2015 by introducing language into their policy statement that asserted they would be patient about moving away from near-zero short-term interest rates.

Yet in doing so, the post meeting statement unmasked the concern central-bank officials’ feel about their next move and how to communicate it. It also showed the internal divisions being created inside the Fed by the prospect of interest-rate increases in the months ahead.

Why is this the case? Despite the Labor Department recently reporting 321,000 new hires last month and the U.S. economy on track for its strongest year of job creation in 15 years, the jobs market still lacks an edge. This is echoed in Federal Reserve Chairman Janet Yellen’s distain for the traditional unemployment rate, which currently at 5.8%, is at its lowest level since September 2008.

Though hiring was broad based last month including employers in: a) the Professional and Business Services category adding 86,000 jobs b) Retailing adding 50,000 jobs c) the health-care sector adding 29,000 positions and d) manufacturing adding 28,000 jobs, this only tells part of the story. It fails to account for the people who are either: a) involuntarily working part-time (when they really want to find a full time job) or b) those who have just given up looking for work. When you include both groups, the real unemployment rate almost doubles to 11.4%!

Additionally, Ms. Yellen has been very cautious about easing monetary stimulus without evidence of wage pressure. As a result, most financial experts believe that a Fed rate increase is several months away. This is the case because the Fed is weighing a mix of economic data. In addition to the job market, inflation is facing a new downdraft that officials said they were watching closely.

In forecasts released along with the statement, 15 of 17 officials said they expected to raise rates in the coming year. The median estimate among officials—meaning half of estimates were above and half below—put rates at 1.125% by the fourth quarter of 2015. They see a shallow path of increases once they start. The median rate estimate for 2016 was 2.5% and for 2017 3.625%.

Those estimates are all modestly lower than the Fed projected in September, meaning that even though officials continue to expect to move rates up next year, they see a mild approach once they start raising them. The estimates—though preliminary and subject to change—imply Fed officials have in mind four quarter-percentage point moves in 2015.

Behind the move toward rate increases is a growing conviction the U.S. economy is on a stronger path, even as the rest of the world struggles with low or slowing growth. Fed officials projected the domestic economy would grow at a rate between 2.6% and 3% in 2015 and that the unemployment rate would fall to 5.2% or 5.3%.

That would put the jobless rate in a zone officials call “full employment,” in which joblessness is low but not so low that it sparks inflation.

Recent economic data did little to dissuade Fed officials from this view.

Yet there are several wild cards that could alter the Fed’s course. The most obvious is the path of inflation. Tumbling oil prices are pushing down consumer price inflation. The Labor Department reported Wednesday, hours before the Fed statement was released, that consumer prices dropped 0.3% in November from a month earlier, the largest one month drop since the 2008 financial crisis rocked the global economy.

Fed officials are sticking to their view that the downward pressure on inflation will be sharp but short-lived. Officials projected 1.0% to 1.6% consumer price inflation in 2015, a large downward revision from earlier estimates. But they saw it returning to between 1.7% and 2.0% in 2016 and between 1.8% and 2.0% in 2017.

Those longer-run forecasts suggest the Fed has confidence that recent oil declines won’t seriously derail their efforts to get inflation back to the 2% goal. It has been running under that goal for nearly three years but many officials believe that as labor market slack diminishes, inflation will move back toward 2%.